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Residents in Grand Rapids, Michigan may have an extra hurdle to jump through when they’re renting out a room in their house.  That’s because the city is imposing a special land use and business license to legitimately rent out a room in their house.

It’s not surprising that the city is imposing these sanctions against homeowners.  That’s because homeowners are using sites like AirBnB to advertise their spare room for vacationers or short term tenants.

These transactions compete directly in the hotel and B&B space, which is why legitimate hotel business owners want to crack down on folks using AirBnB to rent out their spare room.

For “live-in landlords” it’s different.  We’re not competing in the hotel space. What we’re looking for are long-term renters or at least that’s what I’m looking for.

At Fincon, when I introduced myself as someone who rents out rooms so that I can improve my personal finances with the rental income, they immediately thought of AirBnB.

Yes, it’s true that AirBnB can be a great way to rent out a room, but that’s not me. I’m looking for long-term renters. Given the short-term duration or high turn over rate of an AirBnB tenants, it’s not something “live-in landlords” should use consistently to rent out their spare room.  I’ve never advertised my spare rooms on AirBnB nor do I plan to.

My ideal scenario is to find a roommate that is looking for a place to live for at least 3 to 6 months.   The longer, the better as it reduces the time commitment to find and screen a new roommate.

Does this sound like it competes with the hotel industry?

It’s incorrect that “live-in landlords” need a license to rent out a room.  We’re not in the hotel business catering to vacationers.  We’re offering a place to live not a place to visit.

photo credit: philcampbell

  • Deacon @ Well Kept Wallet October 28, 2013, 1:12 pm

    Good to know that we don’t need a license. We are not in the market currently to rent out a room, but you will be the first person I will contact if we ever decide to rent out our second bedroom.

    • Mike October 28, 2013, 5:45 pm

      In most cases, if you’re just renting out a room for a few months at a clip, you don’t need a license. Those folks in GR are being pressured by the city to get a license because they’re running a hotel like business.

  • Dave S. November 25, 2013, 10:09 pm

    I have rented out a spare bedroom in my townhome for about a year. When I checked local laws here in the Minneapolis area of Minnesota, I noticed cities required licenses for non-live in landords, or if you were renting for time periods of less than monthly rentals. I think most localities would be reasonable, but I’ve heard that some cities really have a “gotcha” attitude and are draconian on that. Check your local laws carefully so at least you are aware of what the government wants.

  • YourHowtoGuide4AirBnB December 7, 2013, 1:37 am

    I have seen this go both ways over here in the San Francisco Bay. I have heard you need a permit for a room rental from one city employee and you don’t from another. Not to mention each city being different.


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